Sept 28 (Reuters) – Jefferies Financial Group Inc (JEF.N) on Wednesday beat analysts' estimates for third-quarter profit as robust performance in its merchant banking unit helped cushion the blow from sluggish dealmaking.
The merchant banking division was boosted by the sale of its wood and lumber products business, Idaho Timber, the bank said.
The bank said in July it would reduce the size of its merchant banking portfolio that includes investments in real estate, oil and gas, and other public companies as part of a restructuring.
The unit reported a 60% jump in revenue to $397.8 million in the three months ended Aug. 31, Jefferies said, compared with a 32% drop in its crown jewel, the investment banking and capital markets unit.
Investors tend to look at Jefferies' results as a harbinger for Wall Street, since the company reports ahead of its bigger rivals such as JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc and Morgan Stanley .
After a stellar run in 2021, U.S. investment banking giants have struggled for most of this year as a market sell-off crushes corporate appetite for dealmaking.
Monetary policy tightening by the U.S. Federal Reserve to tame decades-high inflation and aggressive rhetoric from policymakers have also crushed hopes of any relief in the near term.
Excluding costs tied to a regulatory settlement, New York-based Jefferies earned $1.10 per share, comfortably beating Refinitiv IBES estimate of 73 cents.
Net income tumbled 52%, while revenue slumped 21% from a year earlier.
The company's shares were up 2.7% in extended trading on Wednesday, after closing the regular session 2.3% higher.
Our Standards: The Thomson Reuters Trust Principles.
The European Central Bank should focus on interest rate policy over balance sheet operations as its deposit rate is still far from the so-called neutral rate, the bank's intermediate goal, Portuguese central bank chief Mario Centeno told Bloomberg TV.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved